The US government has taken extensive action to disrupt one of the largest pipelines for crypto-related fraud funds. The Justice Department is freezing more than $701 million in digital assets linked to investment fraud against Americans.
The operation was led by the US Department of Justice (DOJ) as part of its Scam Center Strike Force. This is one of the largest coordinated seizures against crypto fraud networks operating abroad. The global crypto market experienced a wave of smaller recovery rallies. The cumulative market capitalization is around $2.6 trillion.
The US Department of Justice is targeting a global fraud pipeline
According to the press release, authorities said the funds were “limited” through a mix of legal processes and voluntary cooperation from crypto exchanges. This was part of a major campaign to dismantle fraud centers that have bilked victims out of billions.
The operation was carried out with only the freezing of funds. Officials confirmed criminal charges against two Chinese nationals. They are accused of running a crypto fraud scheme in Myanmar and attempting to expand their activities into Cambodia. However, the crackdown also included the seizure of a Telegram channel used to recruit trafficked workers into fraud centers.
It added that victims were allegedly forced to impersonate banks and law enforcement agencies in order to defraud Americans. Authorities had reportedly shut down 503 fake investment websites linked to the scheme.
U.S. Attorney Jeanine Ferris Pirro has described the effort as part of a government-wide initiative to combat cyber fraud. She explained that they had indicted the Chinese bosses who were running a scam in Burma. She emphasized that the office continues to work to identify funds stolen from victims. “This government is in lockstep to combat these frauds and we are not finished yet,” Pirro added.
The $700 million is funds related to crypto fraud and money laundering. Authorities are now trying to retain the property and possibly return it to the victims. The effort is coordinated with several agencies. These include the Federal Bureau of Investigation (FBI) and the US Secret Service. But financial supervisory authorities and international partners are also included.
Assistant Attorney General A. Tysen Duva said the goal is to ensure that foreign fraud networks can no longer operate beyond the reach of U.S. law enforcement. “Scammers who target Americans overseas may believe they are unreachable,” Duva said. “We are committed to ensuring that they cannot act with impunity.”
Sanctions imposed in the fight against crypto fraud
The Ministry of Finance had announced sanctions against Cambodian operators linked to fraud centers. On the other hand, the State Department announced rewards for information leading to the recovery of funds related to the so-called Tai Chang fraud network in Myanmar.
Treasury Secretary Scott Bessent said the government would continue to target fraud networks “regardless of where they operate or how well connected they are.”
The scale of the seizure highlights both the reach of these criminal networks and the increasing role of crypto in global fraud schemes. At the same time, it also highlights how blockchain transparency allows authorities to trace and freeze illicit funds on a large scale.
The seized assets could also be added to large government reserves. In 2025, President Donald Trump signed an executive order establishing a strategic Bitcoin reserve and digital asset supply. This was partly funded by confiscated cryptocurrencies.
Officials say the operation is ongoing for now and the $700 million figure may not be the final figure.
The year 2026 began with a massive crypto scam. On January 12th, the TrueBit exploit occurred, in which attackers were able to steal $26.2 million due to an integer overflow vulnerability. Then on February 4th there was a Step Finance breach. An executive email compromise resulted in the theft of $27.3 million.
The KelpDAO Bridge exploit occurred in April. Attackers affiliated with the Lazarus group stole approximately $292 million. They compromised off-chain infrastructure to forge permissions for token “burning”. However, the Drift protocol hack occurred. The massive exploit resulted in a loss of $285 million after an attacker used a compromised admin key to manipulate oracles.
